Question : Which of the following transactions will not result into flow of cash?
Option 1: issue of equity shares of Rs. 4,00,000.
Option 2: Purchase of Furniture of Rs. 3,50,000
Option 3: Redemption of 9% Debentures of Rs. 7,00,000.
Option 4: Cash deposited into bank Rs. 30,000
Correct Answer: Cash deposited into bank Rs. 30,000
Solution : Answer = Cash deposited into bank Rs. 30,000
Cash deposited into the bank does not result in a cash outflow because it represents cash being transferred from one account (cash in hand) to another (bank account). Therefore, it does not affect the overall cash position and is not considered a cash flow transaction. Hence, the correct option is 4.
Question :
Option 1: Deposited Rs.10,000 into bank
Option 2: Withdrew cash from bank Rs.14,500
Option 3: Sale of machinery of the book value of Rs.74,000 at a loss of Rs.9,000
Option 4: Converted Rs.2,00,000, 9% debentures into equity shares
Question : Which of the following transactions will result into inflow of cash?
Option 1: issued Rs.20,000, 9% Debentures to the vendor of machinery
Option 2: Deposited cheques of Rs.10,000 into bank
Option 3: Cash withdrawn from bank Rs.20,000.
Option 4: Received Rs.19,000 from debtors
Question : A company's debt to equity ratio is 1: 2. Which of the following transactions will result in an increase:
Option 1: Credit purchases of goods
Option 2: Cash issuance of debentures
Option 3: Cash issuance of new shares
Option 4: Redemption of debentures
Question : Conversion of debentures into equity shares by a financing company will result in inflow, outflow or no flow of cash.
Option 1: Inflow of cash
Option 2: Outflow of cash
Option 3: No flow of cash
Option 4: Cash and cash equivalents
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